Bank bailouts, or: communism for the capitalists – TheArticle
Bank crises and the bailouts that often ensue are nothing new. Apropos one such bailout, where the authorities had shored up bank solvency by buying up distressed assets, a certain financial journalist wrote, In other words, the fortune of the whole community, which the Government represents, ought to make good the losses of private capitalists. This sort of communism, where the mutuality is all on one side, seems rather attractive to the European capitalists.
The occasion was a bank crisis in Hamburg; the date was November 1857; and the journalist, reporting to readers of the New York Daily Tribune, was Karl Marx.
Since 1857 bank crises and bailouts have come and gone, each one adding layers of literature to the question why bank crises happen and how to prevent them happening again. And with each crisis, public esteem for authorities that oversee financial markets has risen. In 2022, for his analysis of financial markets dysfunction and for steering them out of the 2008 crisis, Professor Ben Bernanke of Princeton University and the Federal Reserve was awarded Nobel laurels. The complacency of 2022 now seems the swan song of a different era. At the very moment when public esteem for financial market regulators could not have been made more conspicuous, troubles have set in.
In October 2022 pension funds in London required emergency intervention. In March 2023 distress calls have gone out from distant ends of the globe, from swashbuckling venture capitalists in California and sedate wealth managers in Switzerland. Regulators are discovering that their hold on financial markets is as firm as a grip on a wet bar of soap in a bathtub.
How did we get here?
Central banks and regulators have nursed back global financial markets from a near-death experience in 2008. Central banks did this by injecting generous doses of near-zero cost funding in the shape of quantitative easing (QE), and regulators by arranging regular health checks in the shape of stress tests.
Central banks in the post-2008 era administered QE as a temporary application. It was supposed to be withdrawn after restoring the patient to health. But given that the nemesis in all three recent cases seems to have been the rise in interest rates, for swathes of the financial sector QE appears to have become a form of artificial life support.
Regulators had expanded their remit to supervise banking practices and oversee stress-testing, undertaken annually with a no-expense-spared allocation of resources. But the pernicious impact of interest rates, increased several times in quick succession, seems to have been missing from their list of checks.
Although it is a commonplace that there is no such thing as a free lunch, it has been thought for some time that there is such a thing as a free bank rescue. Distortions caused by bank rescues are showing up as the money pouring out from central banks has flooded markets for real assets housing, art and luxury goods. Latterly, inflation has spilled over into consumer goods. Once interest rates began to rise, this has begun to pinch those with mortgages as well as other borrowers. Bank bailouts have tried to be all things to all men but have failed. Financial authorities have now reached the end of the road with the palliative measures applied since 2008.
Authorities can rescue banks. Or they can tamp down inflation. But they cannot do both. It would be unconscionable if the authorities were not able to counter Karl Marxs adage: that bank bailouts are a form of communism where the mutuality is all on one side.
We are the only publication thats committed to covering every angle. We have an important contribution to make, one thats needed now more than ever, and we need your help to continue publishing throughout these hard economic times. So please, make a donation.
View original post here:
Bank bailouts, or: communism for the capitalists - TheArticle
- Florida Governor DeSantis signs new law mandating teaching the evils of communism to children as young as five - WSWS - May 1st, 2024 [May 1st, 2024]
- Trump, Biden, communism and more: Letters to the Editor, April 28, 2024 - Florida Today - May 1st, 2024 [May 1st, 2024]
- Communists to run in Karl Marx hometown's election - In Defense of Communism - May 1st, 2024 [May 1st, 2024]
- Slow Down. How Degrowth Communism Can Save the Earth book review - Counterfire - May 1st, 2024 [May 1st, 2024]
- Ron DeSantis wants to teach young people about communism. He should use rock n roll - Washington Examiner - May 1st, 2024 [May 1st, 2024]
- A Survivor of the Cultural Revolution Reviews New Book, 'The Devil and Communist China' - The Stream - May 1st, 2024 [May 1st, 2024]
- European Communist Action: Long live the 1st of May Long live socialism! - In Defense of Communism - May 1st, 2024 [May 1st, 2024]
- Florida children to learn that communism is evil, slavery a skills training program - The South Florida Times - May 1st, 2024 [May 1st, 2024]
- 'Unbridled Agenda of Communism or Socialism, Not in the Constitution Today': SC - ETV Bharat - May 1st, 2024 [May 1st, 2024]
- Pol Pot's Atrocities Still Matter, 45 Years After Khmer Rouge's Fall - Reason - January 12th, 2024 [January 12th, 2024]
- Taiwan election: victory in the face of Chinese communism as country gears up for 'fair election' - GB News - January 12th, 2024 [January 12th, 2024]
- Lenin lives! Join the communists to celebrate his life and ideas! - Socialist Appeal - January 12th, 2024 [January 12th, 2024]
- Goodbye Socialist Appeal The Communist is coming! - Socialist Appeal - January 12th, 2024 [January 12th, 2024]
- Xi Jinpings once-unquestioned authority is showing cracks - The Hill - January 12th, 2024 [January 12th, 2024]
- UK told to 'wake up' to Poland crisis with Donald Tusk 'turning back clock to communism' - Express - January 12th, 2024 [January 12th, 2024]
- The Reality of CommunismWhat Is Social Democracy and Why Is It a Capitalist Dictatorship? - revcom.us - January 12th, 2024 [January 12th, 2024]
- Why Did the Berlin Wall Fall? - The Imaginative Conservative - November 13th, 2023 [November 13th, 2023]
- 1947 and now - The Interpreter - November 13th, 2023 [November 13th, 2023]
- Albania's deal with Italy on migrants has been welcomed by many ... - Las Vegas Sun - November 13th, 2023 [November 13th, 2023]
- Grothman's Bipartisan Hmong New Year Resolution | U.S. ... - Glenn Grothman - November 13th, 2023 [November 13th, 2023]
- Another View: DeSantis was strong, Haley was sharp, Ramaswamy ... - Press Herald - November 13th, 2023 [November 13th, 2023]
- Communism in Britain: The unbroken thread - Socialist Appeal - November 11th, 2023 [November 11th, 2023]
- November 7 as Victims of Communism Day - 2023 - Reason - November 11th, 2023 [November 11th, 2023]
- The Fall of the Berlin Wall and the Fate of the West - Breakpoint - BreakPoint.org - November 11th, 2023 [November 11th, 2023]
- Cruzs new book Unwoke shows readers how to defeat cultural ... - 1330 WFIN - November 11th, 2023 [November 11th, 2023]
- The aftermath of the Velvet Revolution was justice delivered? - Radio Prague International - November 11th, 2023 [November 11th, 2023]
- Remember, Remember, the 9th of November - The Imaginative Conservative - November 11th, 2023 [November 11th, 2023]
- Country Road Chronicles: Communist camp in Westerly in the '30s - The Westerly Sun - November 11th, 2023 [November 11th, 2023]
- The Russian Revolution: The greatest event in history - Socialist Appeal - November 11th, 2023 [November 11th, 2023]
- What Happened to the ACLU by Helen Andrews | Articles - First Things - November 11th, 2023 [November 11th, 2023]
- Open Forum: Thinking of Donald Trump after Tuesday's election - The Winchester Star - November 11th, 2023 [November 11th, 2023]
- Was the USSR Socialist?: an Interview with Alexander Nogovishchev - Lefteast - November 11th, 2023 [November 11th, 2023]
- Remembrance Day: the 11th hour of the 11th day of the 11th month - Fairfaxtimes.com - November 11th, 2023 [November 11th, 2023]
- New York Man Sentenced on Felony Assault Charge for Actions ... - Department of Justice - November 11th, 2023 [November 11th, 2023]
- U.S. Rep. Grothman: Bipartisan Hmong New Year resolution - WisPolitics.com - November 11th, 2023 [November 11th, 2023]
- 'Nazigate' Has Been Quickly Forgotten, But Scholars Warn Its ... - The Maple - November 11th, 2023 [November 11th, 2023]
- Defining the US-China cold war - - November 11th, 2023 [November 11th, 2023]
- Green Township voters remove 5 officials who support Gotion ... - FOX 17 West Michigan News - November 11th, 2023 [November 11th, 2023]
- Louisiana's 'In God We Trust' law tests limits of religion in public ... - American Press - November 11th, 2023 [November 11th, 2023]
- Czechast with Irena Kalhousov, Director of the Herzl Center for ... - Radio Prague International - November 11th, 2023 [November 11th, 2023]
- Letter to the editor: We mustn't forget communism's many victims - Bozeman Daily Chronicle - October 19th, 2023 [October 19th, 2023]
- Writing triumphed over 'hell of communism', says Albania's Kadare - Yahoo News - October 19th, 2023 [October 19th, 2023]
- Opinion Showing anti-communism the red card - Morning Star Online - October 19th, 2023 [October 19th, 2023]
- Letter to the Editor: The Minnesota Daily is against communists ... - Minnesota Daily - October 19th, 2023 [October 19th, 2023]
- Long before the Kentucky legislature waged war on 'woke,' it ... - The Hastings Tribune - October 19th, 2023 [October 19th, 2023]
- All the traditions lost after the Communists entered Beijing The China Project - The China Project - September 9th, 2023 [September 9th, 2023]
- Communism, the youth, and the fight for revolution - Socialist Appeal - September 9th, 2023 [September 9th, 2023]
- Salazar, 27 GOP cosponsors offer bill to educate students about ... - Ripon Advance - September 9th, 2023 [September 9th, 2023]
- Head of Zeus seizes history of communism by broadcaster and ... - The Bookseller - September 9th, 2023 [September 9th, 2023]
- Death threats, communism claims swirl around EV battery project - Automotive News - September 9th, 2023 [September 9th, 2023]
- The New Useful Idiots - Shield of the Republic - The Bulwark - September 9th, 2023 [September 9th, 2023]
- Rift in Samastha over stand towards CPM - Times of India - September 9th, 2023 [September 9th, 2023]
- South Korean president's anti-communist taunts are opening up ... - The Conversation - September 9th, 2023 [September 9th, 2023]
- Argentine priests celebrate reparation Mass after presidential ... - America: The Jesuit Review - September 9th, 2023 [September 9th, 2023]
- Oppenheimer: communism, McCarthyism, and the bomb | United ... - In Defence of Marxism - August 12th, 2023 [August 12th, 2023]
- When teachers have more say than parents, communism has arrived - Hernando Sun - August 12th, 2023 [August 12th, 2023]
- 130 years of Mayakovsky: Art, communism, and revolution - Socialist Appeal - July 20th, 2023 [July 20th, 2023]
- Captive Nations Week Marked for First Time in Ukraine - Jamestown - The Jamestown Foundation - July 20th, 2023 [July 20th, 2023]
- What Was the Marshall Plan? - The Collector - July 20th, 2023 [July 20th, 2023]
- Politics of the Rift: On Thorie Communiste - Notes - E-Flux - July 20th, 2023 [July 20th, 2023]
- The return of EU enlargement | The Strategist - The Strategist - July 20th, 2023 [July 20th, 2023]
- Putin's holy war on Ukraine - UnHerd - July 20th, 2023 [July 20th, 2023]
- The zing zazz factor in a slogan - RNZ - July 20th, 2023 [July 20th, 2023]
- Family who carried Sacred Heart statue were carried by Sacred ... - Catholic Diocese of Lincoln - July 20th, 2023 [July 20th, 2023]
- Risk and Revolution | Wen Stephenson - The Baffler - July 20th, 2023 [July 20th, 2023]
- Victims of Communism, Victims of Modernism - Heritage.org - June 7th, 2023 [June 7th, 2023]
- Communism: FIU event discusses Soviet influence in Cuba and the ... - PantherNOW - May 29th, 2023 [May 29th, 2023]
- Nuclear communism: Lukashenka offers 'nukes for everyone' - TVP World - May 29th, 2023 [May 29th, 2023]
- Georgi Gospodinov and Angela Rodel win International Booker ... - NPR - May 29th, 2023 [May 29th, 2023]
- The China Dragon Roars Back Whether the US Likes It or Not - KCRW - May 29th, 2023 [May 29th, 2023]
- EU, US might not be best digital ID models, but they can help African ... - Biometric Update - May 29th, 2023 [May 29th, 2023]
- Opinion: Young Canadians should learn about the Polish ... - The Hub - May 29th, 2023 [May 29th, 2023]
- Gig Line: Memorial Day - The Coastland Times | The Coastland Times - The Coastland Times - May 29th, 2023 [May 29th, 2023]
- What's on? 10 top TV and streaming tips for Wednesday - RTE.ie - May 29th, 2023 [May 29th, 2023]
- Putin Wants You to Think He's an Anti-Woke Crusader - Foreign Policy - May 29th, 2023 [May 29th, 2023]
- Turkey elections: Erdogan's win highlights political fault lines - Middle East Eye - May 29th, 2023 [May 29th, 2023]
- Is History Written by the Winners? - History Today - May 29th, 2023 [May 29th, 2023]
- The AI Capitalists Don't Realize They're About To Kill Capitalism - Worldcrunch - May 20th, 2023 [May 20th, 2023]
- Alaska House follows Senate to pass bill authorizing sale of carbon ... - Alaska Beacon - May 20th, 2023 [May 20th, 2023]
- Victims of Communism Day - 2023 - Reason - May 4th, 2023 [May 4th, 2023]